Philip Shen: Great. Thanks, Peter. And then, in terms of your Maxeon expansion of the relationship, congrats on that and additional supply that comes with that. I think, on the Q3 call, you guys talked about how Maxeon can account for maybe half of your total module supply in 2023. My guess is that’s going to be higher this — now with the additional supply, I was wondering if you might be able to talk through what that could be now? And then, as it relates to Hanwha, can you get into how much they might be able to supply in 2023? And then in terms of the other vendors, I think we’ve written about how Huawei might be another vendor. Just wondering if you could talk through more about where other module vendors might come in?
And ultimately, with your ability to grow through this more challenging time for the rest of the loan market, could we see some meaningful — we’re kind of backing into maybe 440 megawatts of Maxeon in 2022. And so, that would suggest, maybe you guys could do 900 megawatts in 2023, which is substantially higher than your official 2023 guidance now. And so, how does that gap get bridged. And ultimately, I know your guidance is your guidance, but my sense is there could be some conservatism in that guide. Thanks.
Peter Faricy: Yes. Thanks, Phil. So just to rewind back for context for everybody on the call, when we redid our supply agreement with Maxeon almost at this time last year, one of the big benefits for SunPower was the ability for the first time in our history to seek sourcing from panel partners across the world, which has been a terrific opportunity. Having said that, we’re still pleased to have extended our partnership with Maxeon. They make the best premium panels in the world. We’re really happy to be partnering with them and expanding and extending that agreement is wonderful for both parties, and we hope to be able to work with Maxeon in the premium space for many, many years to come. So we’re pleased with that. In terms of how we’re thinking about supply, last year was challenging.
When the Department of Commerce investigation came out and there was investigation in the AD/CVD, really the supply dried up across the world, and it was very difficult for us to get new supply on board as quickly as we wanted to. And I’m happy to report that not only has that changed, but we’ve put ourselves in a position where we have sufficient supply to growth. And our guidance this year is meant to be conservative. I think there’s some uncertainty in the economy, and we recognize that. But we’ve preserved the opportunity to grow faster by having enough supply and flexible supply agreements to serve that. Right now, we’re just prepared to talk about our agreement with Maxeon and Q Cells, but we have other agreements in the works, and I look forward to sharing more details on that with all of you in the months to come.
Thanks for the question, Phil.
Philip Shen: Yes. Thank you, Peter. One last quick one. NEM 3.0, are you seeing the originations picked up now from maybe December lows. They were really weak kind of the first three weeks of January. We’re well past that now. And so, is the acceleration there in a nice way, or is it okay, but it could be better? What are you seeing thus far in the NEM 3.0 transition? Thanks.
Peter Faricy: Yes. So you’re right. I think the only time last year where things slowed down on the bookings front was sort of that mid-November to mid-December time period. It was hard to know if that because of the election cycle, the economy, the holidays, there’s a lot of potential reasons in there. We’ve been paying very, very close attention to the first six weeks so far this year to get a read on where things are at. And we’re very pleased with what demand has looked like really across the country, but in particular, California. We had pretty ambitious plans for how much we thought we could grow California because we figured that many consumers would want to try to qualify for NEM 2.0, and I would say we’re exceeding those expectations so far.
What’s been interesting is that it’s been a build week-by-week. So, week one was good, week two was better, week three was better. And so even if you go through last week, week six for us, it’s been building so far and we haven’t peaked yet. So, I’m interested to see how we finished the quarter, but I would describe us so far on both California NEM and frankly, the overall residential solar environment as cautiously optimistic, recognizing that six weeks is not long enough to judge this and it’s early in the year. But so far, we’re very pleased with demand. Thank you.
Philip Shen: Great. Thank you so much. I’ll pass it on Peter.
Operator: Thank you. And our next question comes from the line of Kashy Harrison from Piper Sandler. Your question please.
Kashy Harrison: Good afternoon and thank you for taking the questions. So, first one for me was — my first question is around the customer account. You expect to add 100,000 this year. What proportion of the 100,000 is expected to be from California? And then can you speak to how many of these customers have been locked in today under NEM 2.0?
Peter Faricy: Yes. So, total customer accounts for the year at midpoint of 100,000, Think of it as just to provide some color. The easy way to think about it would be 50% California, 50% rest of the country, that’s roughly the split we’re expecting. I think the actual numbers will be determined, frankly, by how much business gets pulled into Q1 bookings that we have a chance to install obviously throughout Q2, Q3, Q4. So, that will determine how that percent evolves throughout the year. And then — I’m sorry, could you repeat your second question again?
Kashy Harrison: I was — you may have already answered it. I was just wondering what proportion of California has been locked in today under NEM 2.0 before the April 14th?
Peter Faricy: Sorry, yes. So, we have about — the backlog I talked about in the opening comments that really carries us. Think of it as through Q2 and the beginning of Q3. So, all the customers that we’re booking now are just adding either additional customers, if we get them done faster to Q2 or helping us fill out our operations pipeline in Q3. But from a California perspective, I would say one of the things we’ve seen with NEM previously is that there is a buildup before the change. And then after the change takes place, things do slow down for a quarter, maybe a quarter or two. And so one of the reasons we’re investing heavily in Q1 to take advantage of this is it just makes sense. That’s a good business practice to build up a big backlog here in California and sort of smooth out our California business over the course of the whole year.
It’s our expectation by the time we get back to the fourth quarter that we’ll resume more normal growth rates and things will be back on track, particularly as California take advantage of both the offer for PV plus solar battery.
Kashy Harrison: Thanks Peter. And then my follow-up question, I was just looking at slide 12, and you indicated here that you have a cost of capital that 300 to 400 basis points below what we saw in the ABS in Q4 and then, I guess, in January. Can you walk us through why — or refresh us on why exactly your cost of capital is so much lower for SunPower Financial. And then, how do you think about — about the cost of alternative sources of capital once that $2 billion you indicated — once you originate enough customers to run through that $2 billion?
Peter Faricy: Sure. Guthrie, do you want to take that?
Guthrie Dundas: Yes. So we’re very happy with our sources of the capital for both lease and loan. I think we’re very competitive on both. I think your question is mostly around loan. But on the lease side, we’re — I’m very happy to have capital to serve essentially all of this year’s demand, most of which comes with fixed income or fixed rates. So it’s much less sensitive to rate exposure. On the loan side, we’ve — part of our partnerships involve different forms of capital, and that’s an area that we intend to grow and diversify and include additional forms of capital via direct ABS market, institutional investors, the banking market, things like that. So we certainly hope to and plan to expand the sources of capital, not only from number of institutions, but types of capital, which will certainly impact what our cost of capital looks like going forward.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Joseph Osha from Guggenheim. Your question, please.
Joseph Osha: Hi, there. Thanks for taking my questions. I wanted to go back to some of the comments that you made on the additional tax credits. So I was looking after the guidance that was released earlier this week on energy communities, which I think might best be described as obtuse. And I’m wondering, as you look at that and think about the process, how long is it going to take you think before you have your dealers and yourselves really fully equipped to claim these credits and apply for them and handle that whole process?
